MillerKnoll Inc (MLKN)
Debt-to-equity ratio
| Jun 3, 2023 | May 28, 2022 | May 29, 2021 | May 30, 2020 | Jun 1, 2019 | ||
|---|---|---|---|---|---|---|
| Long-term debt | US$ in thousands | 1,365,100 | 1,379,200 | 274,900 | 539,900 | 281,900 |
| Total stockholders’ equity | US$ in thousands | 1,432,600 | 1,427,100 | 860,500 | 652,400 | 719,200 |
| Debt-to-equity ratio | 0.95 | 0.97 | 0.32 | 0.83 | 0.39 |
June 3, 2023 calculation
Debt-to-equity ratio = Long-term debt ÷ Total stockholders’ equity
= $1,365,100K ÷ $1,432,600K
= 0.95
The debt-to-equity ratio measures a company's leverage and is calculated by dividing its total liabilities by its shareholders' equity. In the case of MillerKnoll Inc, the trend in the debt-to-equity ratio over the past five years shows variations that are worth examining.
In May 2021, the company had a significantly low debt-to-equity ratio of 0.33, indicating a conservative capital structure with a relatively lower level of debt compared to equity. This implies that a larger portion of the company's assets was financed through equity rather than debt.
However, the ratio increased to 0.92 in May 2020, signifying a substantial shift towards a higher level of debt relative to equity. This increase may have been influenced by the need for additional capital for expansion, investment, or other financial requirements.
The ratio then decreased to 0.39 in June 2019, which suggests a reduced reliance on debt financing and a move back towards a more balanced capital structure.
By June 2023, the debt-to-equity ratio had increased to 0.98, showing that the company's debt level had risen relative to its equity. This could indicate potential concerns regarding the company's leverage and its ability to service its debt obligations.
Overall, the fluctuation in MillerKnoll Inc's debt-to-equity ratio over the past five years implies varying levels of financial risk and capital structure management. It will be important for the company to carefully consider the implications of its leverage and ensure it maintains a sustainable and manageable capital structure.